Legal term for payments in Turkey

The legal requirements with regard to payment terms are generally regulated in the Turkish Code of Obligations ("TCO"). However, Article 1530 of the Turkish Commercial Code ("TCC") lays down specific requirements for deliveries of goods and services between traders/trading companies. Turkiye is not a member of the EU. The aforementioned article is based on the EU Directives 2000/35/EC and 2011/7/EU on combating late payment in commercial transactions and has been transposed into Turkish law on the basis of the EU directives.  

Under Article 1530 of the TCC, the standard payment term is thirty (30) days. The parties to a commercial contract for the supply of goods and services may contractually agree a longer payment term. 

The parties may agree to extend the standard payment term to up to sixty (60) days. An extension of the payment term beyond sixty (60) days is only possible if the extension does not cause unjustified detriment to the seller and the parties explicitly agree in the contract to extend the payment term. 

However, in the case of contracts where the seller is a small or medium-sized enterprise, an agricultural producer or animal breeder or the buyer is a large-scale enterprise, the payment term shall in no circumstances exceed sixty (60) days.

As mentioned above, any payment term exceeding the standard payment term must be explicitly agreed by the parties to the contract. Therefore, a longer payment term beyond this may be agreed in a PO, provided that the PO can be considered a regular contract/agreement according to the general rules of the TCO. 

Article 1530 of the TCC is a mandatory provision. Therefore, any contractual payment term agreed by the parties which is contrary to the terms specified in Article 1530 of the TCC would be null and void. If the buyer fails to comply with the payment terms determined in the contract in accordance with Article 1530 of the TCC, the buyer will be in default. In this case, the seller is entitled to claim interest for default and compensation for damages provided that the general conditions set out in the TCO are fulfilled. There are no further civil law claims or penalties for the breach of the mandatory payment terms defined in Article 1530 of the TCC.

Specific legislation concerning payment obligations for the COVID 19 situation has not yet been adopted. However, the Turkish Government has taken certain measures to protect real and legal persons from the effects of COVID-19. Such measures are included but not limited to (i) indicating "force majeure" in the credit records of companies that were unable to meet their financial obligations during the months of April, May and June to avoid a poor credit record of such companies, and (ii) postponement of credit and interest payments of borrowers facing cash flow disruptions due to the coronavirus pandemic for three (3) months and providing additional support to companies if needed by the government. In 2021, several additional measures were also implemented. In this respect, the payment terms of the low-interest credits provided to tradesmen and craftsmen (esnaf ve sanatkarlar) were restructured. Further, the Banking Regulation and Supervision Authority ("BRSA") has decided that extending the payment terms of consumer loans and vehicles loans until 30.09.2021 will not be subject to the restrictions related to the payment terms of such loans.